Tue, Feb 17, 2015 - Page 8 News List

The LIBERTY TIMES EDITORIAL: Tragedy of the young generation

Last year, the Taiwanese economy benefited from a slight revival of the US economy. In addition, increasing consumer prices were offset by falling international oil prices. Domestic unemployment also dropped slightly, and the TAIEX remains above 9,000 points.

These are clear indications that the difficult situation faced by the general public clearly is improving. However, behind the calm, a storm is brewing. Disasters, political conflict and unexpected events keep occurring on a regular basis, and society remains in a state of anxiety. The most worrying of all these problem is the future facing our young generation.

Two or three decades ago, the Taiwanese economy was taking off. As long as young people were willing to work hard, opportunity beckoned. The sayings that “a hard worker is a winner” and “move forward” were on everyone’s lips. Many of today’s industrial leaders grew up in extreme poverty, but that did not mean that they hung their heads or gave up. They studied hard, worked on the side or even took time out to do hard manual labor. In this way, they paved the way for the golden age of their lives and they helped create an economic miracle for Taiwan.

However, today, as per capita income has reached US$20,000, the young generation is also a lost generation. Youth unemployment is now three times higher than overall unemployment. This is also the highest figure among the four Asian Tigers. Most people’s salaries are between NT$20,000 and NT$30,000 (US$633 and US$949) and these are the “poor young” and the “working poor.” In particular, some young people work under bad conditions in a bad work environment, and they end up as temporary workers or in other untypical jobs. Due to the restrictions inherent in that environment, these jobs often become permanent, and these workers never get a steady job.

The tragedy is that the problems for these young people are mostly structural problems and long term issues, and without thorough and decisive reform, it will be very difficult to turn the situation around. The question is why the overall environment has resulted in such a tragic situation for the young generation.

First, Taiwan has joined the ranks of welfare states and national debt is growing rapidly because the retirement pension for military personnel, civil servants and public school teachers is much too generous, offering a high rate of salary replacement, an 18 percent interest rate on a portion of savings and other benefits that are rarely seen anywhere else. National debt today stands at about NT$6 trillion, which is very close to the legally stipulated ceiling.

Add to this the NT$17 trillion hidden in the benefits for military personnel, civil servants and public school teachers as well as the Labor Insurance pension, and the NT$1 trillion in local government debt, and national debt stands at NT$24 trillion. This is 160 percent of Taiwan’s GDP, the same level owed by Greece at the time of its default.

Furthermore, due to the aging society, falling birth rates and the expected bankruptcy of the pension system in 10 or 20 years’ time, the debt burden will fall on the shoulders of today’s young generation. Dividing NT$24 trillion by the 5.3 million people that are 19 years old or younger works out to about NT$4.5 million per person. In addition to being young, working poor people, they will also have to shoulder all this debt.

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